Coronavirus (COVID-19) has resulted in temporary changes made to Victoria’s laws on commercial and residential renting in response to the COVID-19 pandemic.
- The changes apply for the 6 months of 29 March 2020 to 26 September 2020.
- Chapter 4 of the COVID-19 Omnibus (Emergency Measures) Act 2020 (Vic) introduces temporary amendments to the Residential Tenancies Act 1997 (Vic).
- The new Victorian laws temporarily change how the Residential Tenancies Act 1997 and Retail Leases Act 2003 operate in response to the COVID-19 pandemic.
- The changes introduced by the new laws include:
- changes to evictions, including a ban on notices to vacate
- a ban on rent increases
- The landlord is not allowed to increase the rent for six months from 29 March 2020.
- If a tenant gets a Notice of rent increase, or a rent increase starts, on or after 29 March 2020, it is not valid.
- changes to when tenants can move out
- changes to tenants’ obligations, if related to COVID-19
- restrictions on tenant database listing, if related to COVID-19
- new protections for victim-survivors of family violence
- a new dispute resolution process for tenants and landlords.
- The laws apply to the tenant if the tenant are:
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- the landlord of a residential property,
- the operator of a rooming house,
- the owner of a caravan park, or
- a provider of specialist disability accommodation
- tenant of any of the above.
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- To be eligible for rent relief tenants must have either:
- negotiated a rental reduction with their real estate agent or landlord; or
- have undertaken a dispute resolution or mediation process with Consumer Affairs Victoria; or
- be subject to Victorian Civil and Administrative Tribunal decision which directs a grant be made.
- Rental relief grants paid on behalf of tenants will be based on reduced rent arrangements negotiated between the tenant and landlord and will be used as a credit for rental payments at this reduced amount. The grant should be treated as a deposit amount to the rental balance and has the same effect as if the tenant had made a rental payment. The grant should not be used as a top-up for the landlord to make up the difference between the previous rent and the reduced rent agreed as part of a rent deduction.
- If a Tenant requests a rent reduction they will need to supply evidence such as the following:
- a letter from my employer about my employment being terminated
- a letter from my employer about my income and hours being reduced
- copies of my pay slips showing my income and hours have been reduced
- a copy of confirmation from Centrelink that I have applied for payments
- a copy of my Centrelink income statement showing my eligibility for government financial support due to the loss of my job and regular income
- extracted from an accounting system
- extracted from BAS provided to a financial institution.
- A landlord should not request the following information for rent reduction calculation:
- request future cash flow projections
- request balance sheets, profit and loss or year to date financials
- request the tenant’s bank balance
- require the financial information to be verified, examined, assured, audited or provided by a third party such as an accountant
- require an accountant to provide a letter of comfort or similar on the financial information.
- If your tenant is not paying rent or has advised that they are having trouble paying rent due to the impacts of coronavirus (COVID-19), the tenant must try to come to an agreement with them about the rent they can afford to pay.
- Landlords need to be clear on the reduction in rent they can afford to accept and seek an understanding of what your tenant can afford to pay.
- There is no pre-determined rate or amount that is required for the tenant to pay. A reduced rent amount needs to be reasonable in the circumstances.
- For some tenants, a lesser reduction may be enough to enable them to keep paying rent. For example, if they still have a job but with reduced hours. For other tenants who are relying on government income supports, especially those in private rental agreements, a significant reduction may be needed. As a guide, paying more than 30 per cent of their gross income in these circumstances would be considered as rental hardship.
- What if my tenant refuses to pay rent?
- Contact the tenant to determine why they have stopped paying rent. The tenant cannot evict the tenant for non-payment of rent unless the tenant can establish that the non-payment is in circumstances where the tenant could comply without suffering severe hardship.
- If that is the case, the tenant may seek a Victorian Civil and Administrative Tribunal (VCAT) order to have the tenancy terminated on the ground that the tenant has breached their obligations under the Residential Tenancies Act or the tenancy agreement.
- Can the landlord (or anyone else) come into the tenant rented home during Covid-19?
- Government authorities at both state and federal level have put in place a series of measures that either require or strongly advise people to enter into self-isolation or to practice ‘social distancing’ in an effort to contain or mitigate the spread of COVID-19.
- Restricting entry to the tenant home:
- I suggest the landlord and their agents only arrange for someone to enter the home has urgent repairs needed. The tenant can write to the landlord or agent to request this. See below for example:
[RENTAL ADDRESS]: Entry during COVID-19 restrictions
I hope that the tenant are going well during this strange and difficult time.
As the tenant will be aware, the Victorian Government has eased initial COVID-19 restrictions and now allow up to a maximum of 20 people to attend an auction or inspection (provided this does not exceed the density quotient).
However, this change to the Restricted Activity Directions does not change the current law (Residential Tenancies Act 1997) which does not give landlords, or their agents, a right to run an open inspection or auction without the tenant’s consent.
The change in the Restricted Activity Directions also does not change the need for:
physical distancing, and
good hygiene practices;
I am concerned about people entering my home at this time and want to limit this as much as possible, except where absolutely necessary. I want to make sure I keep everyone safe; both myself and anyone that needs to come into my home.
I am particularly concerned as I have a higher risk of serious infection and/or infecting other vulnerable people and/or other serious consequences if I were to contract COVID-19, because I…
- EXAMPLES OF REASONS THAT MAKE THE TENANTA HIGH RISK
am elderly
am an Aboriginal or Torres Strait Islander person
have a compromised immune system
have a chronic medical condition
have a young child
live in a group home
work in the healthcare industry
I note that the new laws set out that I will not be in breach of my usual duty to allow entry to my home (where I have been given proper notice and the reason for the entry is allowed under the Residential Tenancies Act 1997) if this is due to a COVID-19 reason, being:
I am ill
I am complying with laws, directions and recommendations relating to COVID-19, and the control of COVID-19
I will experience severe hardship if I do allow the entry, or
there is an exceptional circumstance relating to COVID-19 that makes it not possible, or practical, for me to allow the entry.
To keep us all safe I ask that the landlord and their agents only arrange for someone to enter my home for the purposes of carrying out urgent repairs.
I also require that anyone entering my home to carry out urgent repairs, practice proper physical distancing and good hygiene. This includes keeping at least 1.5 metres between themselves and others, wearing gloves and a face mask, and changing gloves before each new customer. And, if gloves need be taken off, washing their hands and using their own towels, avoiding touching surfaces where possible, and cleaning and disinfecting surfaces they touch.
I am happy to make other arrangements that will avoid the need for people to enter, such as taking photos or videos that could be used for virtual inspections.
Please pass this request on to the landlord and let me know of their response at your earliest convenience.
We’re all in this together, and all need to do what we can to reduce the spread of the virus and keep ourselves safe.
If the landlord does not agree to this arrangement, then I may need to apply to VCAT for an order restraining the landlord and their agents from entering my home on the basis that they are not exercising their rights of entry in a reasonable manner, and/or an order seeking an exemption from the entry requirements of the law due to severe hardship.
- Inspections and isolation:
- Because of the nature the contagion, Estate Agents for their own sake should consider the OH&S responsibilities to their staff, prospective tenants and buyers, as well of course, the current tenant household.
- It is Tenants Victoria’s view that there is a mutual duty of care to both the tenant’s household, as well as that of the visitors, and the failure to comply with DHHS recommendations may give rise to potential claims.
- Landlords and agents must limit the number of people who attend auctions and open house inspections; restricted activity directions (No 9).
- From 11.59pm on Sunday 31 May 2020, new directions include restrictions on the number of people who can attend an open house inspection for both sales and rentals. These directions will be in place until 11.59pm on 21 June 2020.
- Restricted Activity Directions (No 9) (Monday 1 June 2020) [DHHS website]
- Under the current laws, landlords do not have a right to run open inspections or auctions without the tenant’s consent.
- An open inspection occurs where the general public can just walk through the home. Generally, and especially now, the tenant do not need to allow the landlord access or entry to your home for this reason (See Higgerson v Ricco (Residential Tenancies) [2014] VCAT 1214 above).
- Generally, the landlord does have a right to bring a prospective buyer or tenant through the premises under law, but this does not extend to open for inspections or auctions. So, despite the changes to the directions, the tenant do not have any duty under the Residential Tenancies Act to allow entry to your home for the purposes of an open for inspection or auction.
- Refusing entry for a “COVID-19 reason”
- Further, even in circumstances where the tenant would usually have a duty to permit entry to the tenant home, for example, where a landlord, or their agent, wanted to show the home to a prospective buyer and the tenant been given the proper notice for this, the tenant can refuse the entry if your refusal is for a “COVID-19 reason”.
- The tenant will not be in breach of The tenant usual duties under the Residential Tenancies Act if The tenant refuse for one of these reasons: if the tenant are ill (whether or not due to COVID-19) complying with laws, directions and recommendations relating to COVID-19, and the control of COVID-19
- The tenant will suffer severe hardship if the tenant does comply, or there is an exceptional circumstance relating to COVID that makes it not possible, or practical, to comply.
- If the tenant are unable to comply because of a “COVID-19” reason between 29 March 2020 and 26 September 2020 the tenant will not be in breach of the tenant agreement or the tenant duties under the Residential Tenancies Act 1997.
- Exceptionally vulnerable people can apply for an exemption:
- If the tenant have conditions that make the tenant exceptionally vulnerable to COVID-19, the tenant can apply to VCAT to make an order that the tenant be “exempted” from certain provisions of theResidential Tenancies Act 1997 (Vic) such as entry by other people into the tenant rented home. This exemption can apply for a period of the time and in some circumstances indefinitely.
- Given the gravity of risk to some people that unnecessary exposure to third-party contact in the home may cause, this is the best opportunity to address some concerns with respect to the home.
- Successfully obtaining a VCAT Order under these provisions is rare. However, in the absence of other actions taken by government, this at least gives VCAT the power and opportunity to address the individuals concerned.
- To prove that the tenant have grounds to be exempted from Part of the Act (such as the entry provisions), the tenant must show that“in all the circumstances, the application of the provision of this Act would occasion severe hardship to the applicant” (s25(3) Residential Tenancies Act 1997 (Vic)).
- It is unlikely to prevent evictions, but this type of pandemic has not occurred before.
- The Charter of Human Rights and Responsibilities Act 2006, is also likely to be useful in such applications.
- Google the following to find out more: The Charter of Human Rights and Responsibilities and the Residential Tenancies Act (PDF)
- The VCAT Order may operate for a specific period of time and may be made subject to any conditions the Tribunal thinks fit.
- Can I be asked to leave my home for an inspection?
- The landlord, or agent, cannot ask the tenant to leave the tenant home just because they want to show it to a prospective buyer or tenant.
- The tenant have a right to exclusive possession and quiet enjoyment of the tenant home under the Residential Tenancies Act and the landlord, or agent, must do all that is reasonable to ensure the tenant have this quiet enjoyment. The landlord/agent cannot compel the tenant to leave.
- Can the tenant insist on an open for inspection or auction?
- If the landlord or the agent try to insist on an open for inspection or auction the tenant can take steps to restrict their entry.
- If the tenant think the landlord or agent’s entry to the tenant home is unreasonable because it disrupts the tenant quiet enjoyment of the rented premises, the tenant can take steps to restrict their entry.
- If the landlord or their agent doesn’t give the tenant enough notice, if they show people through too often or stay too long, that may be considered ‘unreasonable’.
- If the tenant think the landlord is being unreasonable, the tenant can apply to VCAT for a restraining order. The tenant will need evidence about what’s been happening. For example, the tenant can write down the dates and times that people are shown through the property and how long they stay each time.
- Applications for restraining orders are given priority over non-urgent applications and the hearing could be within a couple of days. It’s a good idea to give VCAT a call the day after submitting your application to check if they have set a hearing date. If they haven’t, call the next day. If the tenant miss the hearing, VCAT may rule in favour of the landlord.
- If the landlord doesn’t take reasonable steps to ensure the tenant have quiet enjoyment of the premises then it’s abreach of their duty, and the tenant may be able to claim compensation. The tenant may also be able to claim compensation if your goods are stolen or damaged during an entry.
- If the tenant want to allow entry to your home for an open for inspection or auction, the tenant may want to make an agreement with the landlord or agent about this.
- If the tenant and the landlord or their agent come to an agreement about open for inspections or auctions held at your home, any entry to your home will still need to comply with the Restricted Activity Directions (No 9).
- These Directions limit the number of people who may enter your home. No more than 20 people can enter, with the landlord or agent, for auctions or inspections at any one time.
- But the maximum number of people allowed may be less than 20 depending on the size of your home.
- This is because the Directions limits the number of people that may be present in a “single undivided indoor space” such as an area, room or premises.
- They call this limit the density quotient. Also known as the ‘four square metre rule’.
- To work out the density quotient, the tenant first work out the total area of the space (length in metres x width in metres) then divide by 4. For example if the space is 8.5 metres long and 4.5 metres wide the total area is 38.25 square metres. The tenant then divide 38.25 by 4 to get a density quotient of 9.56. This means no more than 9 people can be in the space at any one time.
- Physical distancing and good hygiene still applies
- Anyone who enters your home must also practise social distancing and good hygiene to slow the spread of coronavirus.
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- Keep your distance – stay 1.5 metres away from others.
- Practise good hygiene.
- Stay at home if the tenant are unwell.
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- Cleaning requirements.
- TheResidential Tenancies Act 1997 (Vic) only requires the tenant to keep the premises reasonably clean. While it is in everyone’s interest to ensure that people comply with the recommended hygiene standards and personal space recommendations, there is no specific duty to ensure the premises are “sterilized”. So, if the tenant get a Notice for breach of duty that requires a standard of cleaning beyond reasonable clean, it may be treated as invalid.
- There is a difference between a breach of duty and a breach of your tenancy agreement (lease). For example, keeping a pet may be a breach of your tenancy agreement but is not a breach of duty under the Residential Tenancies Act 1997.
- A landlord cannot serve a breach of duty notice for the breach of a term in your tenancy agreement, but they can apply to the Tribunal for a compliance order.
- For similar reasons, tenants ending the tenancy should not be compelled to use any specialized services to reduce the risk of a COVID-19 infection to subsequent occupants.
- Repairs and COVID-19:
- Due to current government health requirements on physical distancing, it may be hard to find a tradesperson to do repairs.
- If the landlord is unable to get a tradesperson to do the job the tenant can try to find one yourself and pass on the details to the landlord or agent.
- VCAT can make an Order that the landlord get the repairs done. If the tenant found a tradesperson willing to do the work, the tenant can provide their contact details for the VCAT hearing as evidence that the works can be done.
- If the landlord cannot find someone to do the repairs, the tenant continue to have a right tocompensation.
- Please note there is no right to renovate during a tenancy. If the landlord wants to do work that is not essential – such as renovations – the tenant can apply to VCAT for a restraining order but this may affect the amount the tenant would be entitled to in relation to a compensation claim. Such matters will be determined by VCAT on a case by case basis.
- It is important the tenant take all practical steps to ensure both tradespeople and tenants are safe from the spread of COVID-19.
- wearing a mask and gloves
- changing gloves after each customer
- cleaning all the surfaces that they touch with alcohol or peroxide or bleach
- washing their hands before and after seeing you
- using their own towels.
- Useful links for Covid 19 residential tenancy disputes:
- https://www.tenantsvic.org.au/advice/coronavirus-covid-19/rights-of-entry-and-covid-19/#inspections
- https://www.consumer.vic.gov.au/resources-and-tools/advice-in-a-disaster/coronavirus-covid19-and-your-rights
- http://www8.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VCAT/2014/1214.html
- https://www.vsbc.vic.gov.au/fact-sheets-and-resources/faqs/
- https://www.vsbc.vic.gov.au/your-rights-and-responsibilities/retail-tenants-and-landlords/
- The Charter of Human Rights and Responsibilities and the Residential Tenancies Act (PDF)
Daniel Epstein of Counsel
